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Pimco warns of rating downgrade if Labour fails to act

Pimco has taken another swipe at the UK by claiming it will lose its sovereign credit rating if Labour wins this year’s election and does not take greater action on public debt.

According to reports, the American investment group, which runs the world’s largest bond fund, believe there is an 80 per cent chance of Britain losing its AAA rating should the Government fail to act.

Head of global portfolio management Scott Mather told Dow Jones Newswires that the current reduction plan is lacking in both conviction and details.

A downgrade would push up the borrowing to fund the £178bn of debt in the UK.

Treasury shadow chief secretary Philip Hammond says a downgrade would be terrible news for Britain. He says: “A credit rating downgrade for the UK means higher mortgage costs and higher borrowing costs – choking of the recovery and the creation of new jobs the country so desperately needs.”

Earlier this week Pimco revealed it is to shed holdings of both American and British treasury bonds due to the growing budget deficits.



FSA accused of land-grab at plan to take standards’ role

Law firm Pinsent Masons says the FSA’s proposal to take on governance of professional standards is a “land-grab” attempt to protect its terr- itory ahead of a possible Conservative Government. In the consultation paper on delivering the retail distribution review, the FSA says it would scrap plans for an independent professional standards board in favour […]

Is three a crowd?

The pension versus Isa debate has raged on and off for years. Les Cameron, head of technical at Prudential, asks if three’s a crowd.   I think the debate was arguably settled by pensions freedom when the biggest downside of pensions – limited access and poor death benefits – was fundamentally changed. Total access, albeit with […]


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